EN BANC

[G.R. Nos. L-20589-90. March 21, 1968.]

ERNESTO DEL ROSARIO, petitioner, vs. VICTORINO DE LOS

SANTOS, TOMAS DE LOS SANTOS and THE COURT OF
AGRARIAN RELATIONS, respondents.

R. E. Paredes & S. K. Maranan for petitioner.

Gregorio San Agustin for respondents V. de los Santos and T. de los Santos.
Nostratis & Fajardo for respondent Court of Agrarian Relations.

SYLLABUS

1. AGRICULTURAL TENANCY ACT; CONSTITUTIONALITY AND VALIDITY OF

REPUBLIC ACT NO. 1199, UPHELD. — The rule has been firmly established that
section 14 of the Agricultural Tenancy Act of 1955 (Rep. Act No. 1199) which
empowers a tenant to change the tenancy contract from one of share tenancy
to the leasehold tenancy and vice versa and from one crop-sharing
arrangement to another of the share tenancy is valid and constitutional.

2. ID.; ID.; TENANCY LEGISLATION PURSUANT TO LABOR AND SOCIAL

JUSTICE PROVISIONS OF THE CONSTITUTION. — Tenancy legislation is a
manifestation of a deep and earnest concern to solve an age-old problem of
Philippine society. The framers of the Constitution mindful of the growing
feeling of dissatisfaction with the government's ability to cope with poverty and
misery of the vast majority of the people inserted the provisions of the
protection to labor and social justice in the Constitution, thus, leaving no doubt
about the validity of remedial legislation intended to minimize if not abolish the
oppressive condition usually associated with agricultural labor.
3. ID.; ID.; ID.; SEC. 14 OF REP. ACT NO. 1199, VALID EXERCISE OF POLICE
POWER. — The attribute of police power, reinforced by the constitutional
provisions giving protection to labor and on social justice justifies the
enactment of statutory provisions such as section 14 of Rep. Act No. 1199.
4. ID.; ID.; ID.; SEC. 14 OF REP. ACT NO. 1199, NOT AN IMPAIRMENT OF
OBLIGATIONS OF CONTRACT. — The provisions of the Agricultural Tenancy Act,
particularly of Sec. 14 thereof is not an unconstitutional impairment of the
obligation of am existing contract. Obligations of contracts must yield to a
proper exercise of the police power when such power is exercised to preserve
the security of the state and the means adopted are reasonably adapted to the
accomplishment of that end and are not arbitrary or oppressive. Neither is the
law a transgression on the freedom of contract embraced in the liberty
safeguarded by the due process clause.
5. COURT OF AGRARIAN RELATIONS; FINDINGS OF FACT OF AGRARIAN
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 COURT, IF SUPPORTED BY SUBSTANTIVE EVIDENCE, BINDING ON SUPREME
COURT. — The findings of fact of the Court of Agrarian Relations, if supported
by substantive evidence, are binding upon the Supreme Court. Also, when such
finding is not shown to be unfounded or arbitrarily arrived at or that the Court
had failed to consider important evidence to the contrary.

DECISION

FERNANDO, J : p

This petition for the review of a decision of the Court of Agrarian Relations
represents still another attempt to assail the validity of Section 14 of the
Agricultural Tenancy Act of 1955, 1 which empowers a tenant "to change the
tenancy contract from one of share tenancy to the leasehold tenancy and vice
versa and from one crop- sharing arrangement to another of the share
tenancy." Such attempts in the past on the part of landowners were singularly
unsuccessful, its validity having been consistently upheld. A similar fate is in
store for the effort of petitioner-landowner in this case. The decision of the
Court of Agrarian Relations must be upheld.
Two petitions were filed by now-respondents Victorino de los Santos and Tomas
de los Santos before respondent Court of Agrarian Relations on April 28, 1961,
manifesting their desire, as tenants of herein petitioner-landowner, Ernesto del
Rosario, to take advantage of Section 14 and to adopt the leasehold system
provided, thus changing their previous status as tenants. In the answer
submitted on May 5, 1961, the validity of the above legal provision was
challenged. It was not until October 26, 1962, that a decision was rendered by
the Court of Agrarian Relations, rejecting the claim of unconstitutionality of the
above section as without merit and declaring the relationship between
respondent tenants and petitioner-landowner to be one of leasehold tenancy
effective as of the agricultural year 1961-1962 in a joint decision on the two
petitions filed before it. From the aforesaid joint decision, this petition for
review was filed. As in the case of the proceedings before the Court of Agrarian
Relations, a single opinion suffices to dispose of the matter and to reaffirm once
against the constitutionality of Section 14 of the Agricultural Tenancy Act.

1. Tenancy legislation is a manifestation of the deep and earnest concern to

solve an age-old problem that has afflicted Philippine society, with its roots
going back to the nineteenth century. The framers of the Constitution mindful
of the then growing feeling of dissatisfaction with the ability of the government
to cope with the poverty and misery of the vast majority of our people inserted
the protection to labor 2 and social justice 3 provisions of the Constitution. Thus
they left no doubt-about the validity of remedial legislation intended to
minimize, if not to do away entirely with the oppressive condition that usually
was associated with agricultural labor. In no sphere of governmental activity
then could there be less receptivity to claims on the part of those adversely
affected that thereby their property rights were not given the respect the
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 Constitution affords. More specifically as far as the social justice principle is
concerned, there is the translation into reality of its significance as popularized
by the late President Magsaysay: He who has less in life should have more in
law.

In the second year of his term, the Agricultural Tenancy Act of 19S5 was
passed. The particular provision, once again assailed in this litigation, as
previously mentioned, vested in the tenants "the right to change the tenancy
contract from one of share tenancy to leasehold tenancy and vice versa and
from one-crop-sharing arrangement to another of the share tenancy." 4 Its
validity was first sustained in De Ramas v. Court of Agrarian Relations. 5

This Court, through Justice Labrador, spoke of the objective of the law thus:
"The purpose of this Act, according to Section 2 thereof, is 'to establish
agricultural tenancy relations between landholders and tenants upon the
principle of social justice; to afford adequate protection to the rights of both
tenants and landlords, to insure an equitable division of the produce and
income derived from the land; to provide tenant-farmers with incentives to
greater and more efficient agricultural production; to bolster their economic
position and to encourage their participation in the development of peaceful,
vigorous and democratic rural communities.'"
Its justification in the light of our history was stressed in this wise: "The history
of land tenancy, especially in Central Luzon, is a dark spot in the social life and
history of the people. It was among the tenants of Central Luzon that the late
Pedro Abad Santos, acting as a saviour of the tenant class, which for
generations has been relegated to a life of bondage, without hope of salvation
or improvement, enunciated a form of socialism as a remedy for the pitiful
condition of the tenants of Central Luzon. It was in Central Luzon also that the
tenants forming the PKM organization of tenants and, during the war, the
Hukbalahap, rose in arms against the constituted authority as their only
salvation from permanent thraldom. According to statistics, whereas at the
beginning of the century we had only 19% of the people belonging to the
tenant class, after 60 years of prevailing, the percentage has reached 39%. It is
the desire to improve the condition of the peasant class that must have
impelled the Legislature to adopt the provisions as a whole of the Agricultural
Tenancy Act, and particularly Section 14 [thereof]."

The opinion in the De Ramas decision, after setting forth that the legal question
posed was whether there was an unconstitutional impairment of the obligation
of an existing contract, explained why the answer must be in the negative.
Thus: "Obligations of contracts must yield to a proper exercise of the police
power when such power is exercised, as in this case, to preserve the security of
the State and the means adopted are reasonably adapted to the
accomplishment of that end and are not arbitrary or oppressive." The De Ramas
decision was subsequently followed in several cases. 6
Then in Ilusorio v. Court of Agrarian Relations, 7 in sustaining once again the
validity of the above Section 14, this Court, in an opinion by the then Justice,
now Chief Justice, Concepcion, declared: "We find no cogent reason to depart
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 from the view we have so far adhered to, which is in consonance with our
consistent jurisprudence on the police power of the State." As distinguished
from the De Ramas holding, the objection to the validity of Section 14 in this
case was premised not only on the alleged impairment of an existing obligation
but likewise on the transgression to the freedom of contract concept which is
embraced in the liberty safeguarded by the due process clause. Its validity then
as a police power measure is now beyond question. 8
It thus appears indisputable that reinforced by the protection to labor and social
justice provisions of the Constitution, the attribute of police power justifies the
enactment of statutory provisions of this character. That public interest would
be served by governmental measures intended to aid the economically under-
privileged is apparent to all. Nor is the means relied upon to attain such a valid
objective unreasonable or oppressive. Considering that in the adjustment or
reconciliation of the conflicting claims to property and state authority, it suffices
that there be a rational basis for the legislative act, it is easily understandable
why, from the enactment of the Constitution with its avowed concern for those
who have less in life, the constitutionality of such legislation has been
repeatedly upheld.

Thus prior to the Agricultural Tenancy Act of 1955, there were previous statutes
which likewise passed the test of validity in earlier decisions. The first decision
of importance is Tapang v. Court of Industrial Relations. 9 In that case, the
argument that the then Tenancy Law 10 was unconstitutional because it
impaired the obligation of contracts was considered by the court to be without
any force as outside of the fact that the contract entered into between the
petitioner and the husband of the respondent during his lifetime and the
respondent herself after his death was without a fixed period, the work being
accomplished from year to year, the Constitution ordains the promotion of
social justice and the protection to labor, specially to working women. Then
came Ongsiako v. Gamboa, 11 which sustained the retroactive effect of an
amendatory act 12 to then tenancy statute as against the contention that there
was a violation of the non- impairment clause. This constitutional provision is no
bar, according to this Court, for legislation affecting existing conditions enacted
by the State in the proper exercise of the police power.
The unanimous opinion of this Court in the recently decided Genuino v. Court of
Agrarian Relations, 13 with its unqualified approval of the power of Congress to
abolish share tenancy, as reflected in the latest legislation on the subject, 14 as
against the contention that with the limitation on the freedom of contract there
is a deprivation of property without due process of law, evinces unmistakably
the firmness with which it adheres to the view that the police power is of
sufficient amplitude and scope to free from the taint of constitutional infirmity
legislation intended to ameliorate the sad plight of Filipino tenants and
agricultural workers. Thereby, this Court has manifested its fidelity to the
constitutional intent so obvious from a cursory glance at the applicable
provisions of the Constitution. That will explain why every challenge hurled
against the validity of this particular provision was, from the outset, doomed to
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 futility.
2. In addition, another issue which according to the petition for review is
"now squarely raised before this [Court] is whether or not the use of a tractor of
a land-owner in addition to his carabao and farm implements is a ground for a
disqualification of said land-owner to undertake the personal cultivation of his
own land and the ejectment of his tenants" pursuant to the Agricultural
Tenancy Act? 15 That point would have been deserving of further inquiry were it
not for the express finding of the Court of Agrarian Relations that respondent,
now petitioner before this Court, "does not have the bona fide intention to
cultivate the landholding in question personally", 16 That is a finding of fact
supported by substantial evidence, and as such, binding upon this Court. It
cannot therefore be disturbed on appeal. 17 The latest formulation of the above
principle as set forth in Lapina v. Court of Agrarian Relations, 18 in an opinion by
Justice Dizon, is to the effect that its finding of fact must be accepted "unless it
is shown to be unfounded or arbitrarily arrived at, or that the [Court] had failed
to consider important evidence to the contrary." There is no occasion therefore
to consider further the issue of whether or not the ejectment of now
respondents-tenants would lie.
WHEREFORE, the decision of the Court of Agrarian Relations now under review
is affirmed. With costs against petitioner,.
Reyes, J.B.L., Actg. C.J., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez,
Castro and Angeles, JJ., concur.
Concepcion, C.J., is on official leave.

Footnotes

1. "SEC. 14. Change of System. — The tenant shall have the right to change
the tenancy contract from one of share tenancy to the leasehold tenancy
and vice versa and from one crop-sharing arrangement to another of the
share tenancy. If the share tenancy contract is in writing and is duly
registered, the right may be exercised at the expiration of the period of the
contract. In the absence of any written contract, the right may be exercised
at the end of the agricultural year. In both cases the change to the leasehold
system shall be effective one agricultural year after the tenant has served
notice of his intention to change upon the landholder." (Republic Act No.
1199)

2. "The State shall afford protection to labor, especially to working women and
minors, and shall regulate the relations between landowner and tenant, and
between labor and capital in industry and agriculture . . ." Art. XIV, Section 6,
Constitution of the Philippines.
3. "The promotion of social justice to insure the well-being and economic
security of all the people should be the concern of the State." Art. II, Section
5, Constitution of the Philippines.

4. Section 14, Republic Act No. 1199. .

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 5. L-19555, May 29, 1964.

6. Macasaet v. Court of Agrarian Relation, L-19750, July 17, 1964; Uichangco v.

Gutierrez, L-20275-9, May 31, 1965; Gamboa v. Pallarca, L-20407, March 31,
1966; Vda. de Quizon v. Ortiz, L-20905, April 30, 1966.

7. L-20344, May 16, 1966.

8. Subsequent to Ilusorio v. Court of Agrarian Relations, the validity in Section
14 was upheld in Reyes v. Santos, L-19961, September 14, 1966; Enriquez v.
Cabangon, L-21697, September 23, 1966; Tinio v. Macapagal, L-21012,
February 25, 1967; Diaz v. Molina, L- 21150, April 27, 1967.
9. 72 Phil. 79 (1941).
10. Com. Act No. 461 (1939).
11. 86 Phil. 50 (1950).

12. Republic Act No. 34 (1946).

13. L-25035 and L-25036, February 28, 1968. .
14. Agricultural Land Reform Code, Republic Act No. 3844 (1963).
15. Section 50(a) of Republic Act 1199.

16. Decision of the Court of Agrarian Relations, Annex "R" of the petition, p.7.
17. Cahilo v. De Guzman L-13431, Nov. 24, 1959; Yusay v. Alojado, L-14881,
April 30, 1960; Ulpiendo v. Court of Agrarian Relations, L- 13891, Oct. 31,
1960; Cañada v. Rubi, L-15595, Dec. 29, 1960; Mateo v. Duran, L-14314,
Feb. 22, 1961; Tomacruz v. Court of Agrarian Relations, L-16542-43, May 31,
1961; De Santos v. Acosta, L-17564, Jan. 31, 1962; Ilusorio v. Santos, L-
15788, March 30, 1962; De Domingo v. Court of Agrarian Relations, L-12116,
April 28, 1962; Estrada v. Court of Agrarian Relations, L-17481, April 28,
1962; De la Cruz v. Dollete, L-17932, May 30, 1962; Benson v. Ocampo, L-
18189, Dec. 29, 1962; Silva v. Cabangon, L-14801, Jan. 31, 1963; Bermudez
v. Fernando, L-18610, April 22, 1963; Toledo v. Court of Agrarian Relations,
L- 16054, July 31, 1963; Salazar v. Santos, L-15890, Feb. 29, 1964; Villaviza
v. Panganiban, L-19760, April 30, 1964; Cruz v. Pangan, L- 19749, May 30,
1964; Evanado v. Blanco, L-17602, June 30, 1964; Tuvera v. De Guzman, L-
20547, April 30, 1965; Casaria v. Rosales, L-20288, June 22, 1965; Enriquez
v. Cabangon, L-21697, Sept. 23, 1966.
18. L-20706, September 25, 1967.

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